Truesdale v. Friedman

• Decision Date: 15 January 1965
• Docket Number: No. 39171,39171
• Citation: 270 Minn. 109,132 N.W.2d 854
• Parties: John O. TRUESDALE and Charlotte Louise Truesdale, individually and dba Midway Truck Stop, et al., Respondents, v. Hyman J. FRIEDMAN, individually, and dba Midland Oil Company, et al., Appellants.
• Court: Minnesota Supreme Court

Page 854

132 N.W.2d 854

270 Minn. 109

John O. TRUESDALE and Charlotte Louise Truesdale individually and dba Midway Truck Stop, et al., Respondents, v.Hyman J. FRIEDMAN, individually, and dba Midland Oil Company, et al., Appellants.

No. 39171.

Supreme Court of Minnesota.

Jan. 15, 1965.

Syllabus by the Court

1.Since the adoption of Minn.St. 512.49, notice to the seller of a breach of warranty is a condition precedent to recovery for such breach.It was therefore incumbent upon plaintiffs to give defendants notice of the alleged breach within a reasonable time.

2.The standard as to the reasonableness of the delay in the giving of such notice is not changed although the defect may be latent or hidden.The time when the buyer becomes aware or should have become aware of the claimed defect fixes the time from which the delay commences and from which the reasonableness or unreasonableness of the delay must be determined.

3.A delay in notification from 12 to 23 months would be unreasonable as a matter of law when the buyer is aware, or should be aware, of the defect.

4.Notice of breach of warranty must be pleaded and alleged to have been given with reasonable particularity.The notice must be more than a mere complaint.It must inform the seller that the buyer claims a breach of some warranty and must apprise the seller that the buyer intends to claim damages therefor.

5.Consent to try an issue outside of the pleadings cannot be implied where evidence relating to the issue is also pertinent to issues actually made by the pleadings.Relief cannot be based on issues that are neither pleaded nor voluntarily litigated.

6.An amendment of pleadings to conform to proof after judgment is not permissible if such amendment brings in some entirely extrinsic issue or changes the theory on which the case was actually tried, even though there is evidence in the record--introduced as relevant to some other issue--which would support the amendment.

7.Under the Uniform Sales Act the measure of damages for a breach of warranty is the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had been as warranted.

8.Where there is no evidence, direct or circumstantial, to support an inference, any conclusion based thereon becomes merely a conjecture.

Leonard, Street & Deinard, Harold D. Field, Jr., and Jermy C. Shea, Minneapolis, for appellants.

Firestone, Fink, Krawetz, Miley & O'Neill, St. Paul, for respondents.

NELSON, Justice.

The action was brought by plaintiffs to recover damages for the alleged fraud of appellants-defendants in sales of gasoline to plaintiffs.Defendants are sellers and distributors of petroleum products, Hyman J. Friedman, the individual defendant, being a stockholder and director of the corporate defendants.

Plaintiffs earlier moved this court to dismiss the appeal for the failure of defendants to print an adequate record or else to limit the appeal to those issues not involving the sufficiency of the evidence.This motion was denied, subject to the right of plaintiffs to renew it at the time of oral argument.Truesdale v. Friedman, 267 Minn. 402, 127 N.W.2d 277.

At the close of the trial the trial court held that fraud had not been proved, and, over the objection of both counsel, submitted the case to the jury on a breach of warranty theory.The jury returned a verdict for plaintiffs in the amount of $14,500.Defendants moved for judgment notwithstanding the verdict or, in the alternative, for a new trial.The motion for a new trial was denied unless plaintiffs refused to accept a remittitur from the verdict in the amount of $4,500, thereby reducing the judgment to $10,000.Plaintiffs accepted the remission and defendants therefore appeal from the order.

In June 1955plaintiffJohn O. Truesdale purchased Midway Truck Stop, a gasoline service station in St. Paul, and he and his wife, plaintiffCharlotte Louise Truesdale, began operating it on June 1, 1955.Mr. Truesdale, hereinafter referred to as plaintiff, learned from the former owner that defendant Friedman, hereinafter referred to as defendant, was a distributor of petroleum products and had been supplying Midway Truck Stop prior to the purchase.Plaintiff then contacted defendant, and during the first 3 weeks of June 1955they engaged in various conversations concerning the possibility of defendant's continuing to supply Midway Truck Stop with petroleum products.These discussions culminated in an oral agreement between plaintiff and defendants under which defendants were to supply plaintiff with regular and ethyl gasoline directly from a pipeline which supplied sellers of major brands such as Phillips 66 and Skelly.The agreement is admitted by defendant.

From June 1, 1955, through June 2, 1957, defendant was plaintiff's sole supplier of gasoline.From June 2, 1957, to November 1957, plaintiff continued to purchase gasoline from him but not on an exclusive basis.During this 2 1/2-year period plaintiff purchased 460,539 gallons of regular and 62,363 gallons of ethyl gasoline from defendants.

Plaintiff testified that before the agreement was made defendant told him that the gasoline was coming directly from the Great Lakes Pipeline on County Road C and Cleveland Avenue, St. Paul, and that he could go there to see it for himself.Subsequently plaintiff went to the pipeline and saw trucks belonging to defendants, Skelly, and Phillips 66 being filled with gasoline from it.The claim of fraud is based on defendant's statement that he would supply plaintiff with regular and ethyl gasoline which came directly from the pipeline used by suppliers of major brands.In his complaint plaintiff alleges that defendants did not supply him with gasoline directly from the pipeline but mixed the regular and ethyl gasoline with inferior petroleum products before delivery to plaintiff; that the blended gasoline was worth $.06 less per gallon and that plaintiff was thereby damaged in the amount of $31,380.12.Plaintiff alleged that his loss of business amounted to $10,000 and also sought exemplary damages in the amount of $20,000.

Defendant's records indicate that on 10 occasions he sold to plaintiff regular gasoline blended with natural gasoline.He testified that he supplied the blended gasoline to plaintiff during gas price wars, at plaintiff's request, and that it was sold to plaintiff at a discount.Plaintiff denies that he ever requested blended gasoline or that he ordered it.There was no written evidence produced which substantiates defendant's claim that he sold blended gasoline to plaintiff at a discount.

Invoices showing all deliveries of petroleum products by defendant to plaintiff from June 1955 through November 1957 were introduced as exhibits by plaintiffs.No invoice shows any representation other than 'R' for regular and 'E' or 'P' for ethyl or premium gasoline.

From June 1956 through November 1957defendant purchased 320,000 gallons of natural gasoline.It appears from the record that all natural gasoline received by him was used for blending purposes.Defendant testified that the natural gasoline was blended with both regular and ethyl but denies delivering blended ethyl to plaintiff.While defendant admits delivering blended regular to plaintiff on nine occasions, he denies positively delivering anything but unadulterated pipeline ethyl to plaintiff.

Defendant's accounting procedure was as follows: His drivers would go to the pipeline and have the tank filled with the amount of gas which defendant requested.A 'manifest' indicating the number of gallons of ethyl or regular gasoline procured would be given to defendant's drivers.Defendant's drivers would then go to defendant's customers and the customers' needs would be fulfilled.In each case the driver would then fill out an invoice ticket, giving one copy to the customer and stapling one to the manifest.The manifest and invoices were then returned to defendant and by examining the invoices he could determine to whom and in what quantities the gasoline represented by the manifest had been sold.

One of defendant's former truck drivers, Floyd Hill, testified that on one occasion (he could not remember the date)plaintiff had ordered ethyl but that prior to the delivery he had run out of ethyl.He called defendant and so informed him and asked for advice.Defendant told him to give plaintiff regular.Hill followed orders and was in the process of pumping regular into plaintiff's tank when plaintiff came out.He lifted up the hose and discovered the gas being pumped in was white.(Ethyl is red.)Hill testified that plaintiff then went into the station and called defendant.Under cross-examination Hill testified that plaintiff came out and said defendant would take care of it.

Defendant testified that the cost of natural gasoline was 1 to 1 1/2 cents below that of regular gasoline.Invoices disclosed that on June 10, 1957, regular gasoline cost 12.75 cents per gallon, transportation from Texas included.About the same date natural gasoline was 5.75 cents per gallon, transportation from Texas excluded.Defendant claims the difference between the prices represented transportation costs and loading and unloading costs.The loading and unloading costs were 1/2 cent per gallon.

To support their allegation concerning loss of business, plaintiffs introduced one witness, Ed Engdahl, who testified that he was in the trucking business and had purchased diesel fuel and gasoline from plaintiff.In the early part of 1957he purchased a 1957 Buick and began to purchase ethyl for it from plaintiff.His Buick 'pinged' and rattled on this ethyl but did not when he used Mobil ethyl.He discontinued purchasing ethyl from plaintiff but continued to buy his other fuel needs from him.Plaintiffs failed to introduce evidence showing a decline in profits, and the trial judge ruled that they had not proved loss of...